New Income Tax Regime 2026-27: Tax Slabs, Deductions & Key Changes
A comprehensive breakdown of the new income tax regime for FY 2026-27, including updated tax slabs, standard deduction changes, and which regime benefits you more.
myEngineer Team
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Updated Tax Slabs for FY 2026-27
The Union Budget 2026 brought significant changes to the new income tax regime. Here's the updated slab structure:
| Income Range | Tax Rate | | ----------------------- | -------- | | Up to ₹4,00,000 | Nil | | ₹4,00,001 – ₹8,00,000 | 5% | | ₹8,00,001 – ₹12,00,000 | 10% | | ₹12,00,001 – ₹16,00,000 | 15% | | ₹16,00,001 – ₹20,00,000 | 20% | | ₹20,00,001 – ₹24,00,000 | 25% | | Above ₹24,00,000 | 30% |
Key Changes from Budget 2026
- Enhanced Standard Deduction: Increased to ₹1,00,000 from ₹75,000
- No Tax up to ₹12 Lakhs: With rebate under Section 87A, effectively no tax for income up to ₹12 lakhs under new regime
- NPS Deduction: Employer NPS contribution deduction increased to 14% for all employees
Old vs New Regime Comparison
The old regime still allows deductions under Section 80C, 80D, HRA, etc. For salaried individuals with heavy investments, the old regime might still be better if your total deductions exceed ₹4,00,000.
Who Should Choose New Regime?
- Salaried individuals with minimal investments
- Those who prefer simplicity in tax filing
- Income above ₹15 lakhs with limited deductions
Who Should Stick with Old Regime?
- Those with home loan interest (Section 24)
- Heavy investors in PPF, ELSS, NPS
- Those claiming HRA exemption in metro cities
Action Items
- Review your total deductions for the financial year
- Use the tax calculator on the Income Tax portal
- Inform your employer about regime choice before April
- Plan investments accordingly
Source: Income Tax Department, Ministry of Finance, Government of India
myEngineer Team
The editorial team at myEngineer.in, combining engineering expertise with policy analysis to deliver actionable insights on India's evolving regulatory landscape.